Pizza firm DP Eurasia delivers profit rise, evaluating Russian business

DP Eurasia (DPEU.L), which runs the Domino’s Pizza brand in Turkey and Russia, said on Wednesday it was weighing options for its Russian business after reporting a rise in annual core profit as it raised prices to offset inflation.

DP said it continued to evaluate its presence in Russia, including a possible divestment, after starting the process in December. It said the business was now a discontinued operation.

Its adjusted core earnings (EBITDA) rose 5.3 per cent to 311.0 million Turkish lira ($16.1 million) in 2022. Excluding the impact of hyperinflation in Turkey, the earnings rose 93.1 per cent.

The figure excludes the Russian business, the company said.

DP has been increasing prices and introducing more affordable products such as Pizzetta, priced at $1, in response to Turkey’s high inflation.

“I believe inflation is a challenge but also is an opportunity for our business, because there are a lot of customers trading down to our food,” CEO Aslan Saranga said in a post-earnings call.

Saranga said long-term partnerships with its key suppliers also helped the company manage costs.

DP said 12 out of the total 655 Domino’s Pizza outlets in Turkey, mostly franchisee-owned, were not operational after the Feb. 6 earthquake.

The company said it was working on several options for the stores that were still shut, including moving them to other cities, but added the impact on operations was not expected to be material to 2023.

The company expects to maintain its organic and like-for-like sales growth momentum in 2023.

It said its system sales, which include sales both from its own and franchised stores, rose 11.5 per cent on a like-for-like basis in Turkey in the first 11 weeks of 2023.

After adding 48 stores in Turkey in 2022, it plans to open 35 to 40 stores and 50 to 60 outlets of its coffee chain COFFY this year.

($1 = 19.3025 liras)